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As May comes to an end, the last five days have seen Utilities and FANG stocks up 3%. Whaaat?! This is rather unique and perhaps it's become a "Crazy Town" type of market.  Unique in that Utilities are a traditional risk adverse sector and FANG has been the go to risk on group.  In the last few notes I've mentioned the potential for further upside with some of the FANG indexes and stocks.  Today the FANG indexes are up 1% while the S&P 500 is down .50%, S&P 100 is down .23%.  This illustrates the narrow attribution that is happening despite many calls that cumulative breadth is supportive of further market gains.  These FANG stocks are becoming crowded on the long side with barely any short interest that could cause a squeeze.  This is a chase.  When it ends it will be spectacular.  The DeMark Countdowns on them are on day 9 of 13.  I'll keep you updated on this progress but my view is to lighten up into the exhaustion signals.  

Also notable today is the weakness in Consumer Staples, a sector I have recently turned positive on.  The culprit is weak earnings from Dollar General.  They sell all of the big products from the major Staples so some of the gains have been given back.  I have no changes to my opinion reiterate looking at the top five weights as they are down over 20%, average nearly 4% in yield, and sell products we can't live without.  

Tomorrow there will not be a Daily Note published.  I am traveling and might have some market comments on Twitter.  Get plenty of rest tonight as tomorrow morning has the US employment reports, PMI's, and ISM non manufacturing report.  

Notable:

• US Markets - Pop in sentiment but likely won't persist.  
  
• Hedge Fund Telemetry Trade Ideas - Stopped out of FB
  
• European Markets - Still looking very dangerous in Europe
  
• Currencies - Reversals in major currencies as expected.  
  
• Asian Markets - Nikkei likely down tomorrow.  Watching China for relative trade
  
• World Indexes - Not looking good around the world.  
  
• Crazy Town - When Utilities and FANG's lead
  
• Disney - Getting closer to a buy
  
• Bond Update - Big jump in bullish sentiment continues to show risk off action
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600
  

Here's a link to the Hedge Fund Telemetry market sentiment page with 40 charts of sentiment including equities, bonds, currencies, and commodities updated each day.   

SPX bullish sentiment is at 48% up from the previous day 38%

SPX has made no progress after the last two days.   2700 is still the first support and then the 2672 50 day moving average.

Nasdaq bullish sentiment is at 51%

QQQ Nasdaq 100 still peaking above the range thanks to the FANG names

IWM Russell 2000 is down today and I reiterate I would not doubt the current upside Countdown moves more sideways vs up.    Too late to buy this and with a weekly upside exhaustion it's just a matter of time when the daily exhausts and this reverses.  I expect there is a lot of small cap tourist money chasing here as I've seen many retail minded technicians touting this

Dow Jones continues down and is back under the 50 day.  

OEX S&P 100 is also down today and this really matters since the FANG stocks are up 1% today while this is down.  That says there is more damage being done which is masked by the FANG's

Euro Stoxx 50 made a new recent low today giving back yesterday's bounce

Spain has dropped very hard after the recent upside exhaustion signal

Italy also has reversed very hard after the upside exhaustion signal.  Tomorrow if down could lead to something next week very ominious

Euro Banks still going lower.  I've been negative on Euro Banks for a long time.  

UK should move to the 50 day moving average.  How good did the exhaustion signals work on the upside and downside?  

Deutsche Bank has had some downside exhaustion signals but there is a secondary downside Countdown on day 3/13.  Did you know this was lower in 2016?  

US Dollar bullish sentiment is at 86% down from the previous day of 94%

DXY US Dollar Index has reversed but is slightly up today.  My call is lower high followed by higher high

Euro bullish sentiment is at 17% up from 4% the previous day.  

Euro bounce off of recent downside exhaustion 13.  I expect it will lift to red dotted TDST line at 1.1938

Nikkei bounced off the 50 day as expected yet there still is a downside green Setup on day 7 of 9.  Going lower

Hong Kong Hang Seng bounced after the downside red Countdown 13.  This might be a decent relative trade vs other major indexes

Shanghai same story

Bloomberg World Index has support at 240 and it's under the 50 again.  The FANGS can't overweight themselves in this index.  

Vanguard International ex US looks terrible.   55.25 support.  

Utilities look good and have an upside wave 5 target at 53.44.  Wave 3 price objective worked well

FAANG Custom Index is on day 9 of 13.  The narrow attribution will not persist and when this breaks it will really weigh on the indexes just like they did to the upside

FAANG vs SPX on a daily relative basis has upside exhaustion signals that also says take some off. The persistent spike with multiple upside exhaustion signals like we saw in January won't happen again.  

FB is on day 10 of 13.  I was stopped out of this earlier today.  I'll be back once we get the upside exhaustion.  Oh yes, I will be back.

Disney is nearing a daily downside exhaustion Countdown 13.  It has to be under the 8th red bar.  When this happens I will add it to the long side with a 2.5% starter size.  

DIS weekly has had a good record on the weekly signals. The downside weekly exhaustion triggered this week.  Considering I am short NFLX which has a larger market cap now vs DIS and NFLX is on day 12/13 and had a weekly upside exhaustion, this will be a pair trade in media.  

DIS vs SPX relative ratio on a monthly basis shows how it has underperformed the SPX since 2015.  With the downside exhaustion signals, I expect DIS to relatively outperform soon.  

Bond bullish sentiment is at 61% and surprising to me that it wasn't lower from 66% the previous day.  

US 10 Year Yield dropping again so perhaps that's why sentiment didn't drop much.  Risk off trade is alive

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